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CoAL updates Uitkomst reserves

Published by , Editorial Assistant
World Coal,

The company acquired 91% of the shares and claims in Uitkomst for R275 million (US$20.5 million) on 30 June.

The company acquired 91% of the shares and claims in Uitkomst for R275 million (US$20.5 million) on 30 June 2017 with the remaining 9% held by broad-based trusts, including employees and communities.


The operations Uitkomst Colliery is located approximately 20 km northwest of the town of Utrecht in the Kwazulu Natal province, South Africa. Uitkomst is accessible from a well maintained road network and is 27 km from the leased Wykom rail siding from where coal is railed to the Richards Bay Coal Terminal. The Colliery comprises a South Adit (horizontal shaft) using traditional board-and-pillar mining methods, as well as a planned life-of-mine extension to the north of the adjacent Klipspruit Mining Area (North Adit).

The colliery has required environmental and social permits in place as well as a valid Integrated Water Use Licence (IWUL) and has applied for an amendment of its IWUL to include the North Adit. Uitkomst has secured long-term access to the surface rights required for the colliery and will use the South Adit surface infrastructure and processing plant for the washing of rOM coal from the North Adit.

The South Adit generates an average of 45 000 tpm ROM coal from two underground sections, supplying the owner-operated processing plant. This coal yields approximately 30 000 t of saleable coal and Uitkomst also purchases RoM coal from collieries situated in the surrounding area to use surplus processing plant capacity.

Uitkomst is a high grade export quality thermal coal deposit with metallurgical applications and currebtly sells sized coal products namely, export coal (0 to 40 mm) as well as peas (10 to 25 mm). The products sold by the Colliery have a typical calorific value of 28 MJ/kg 12% ash and sulfur levels below 1%.

Salient features

The Report details the Coliery’s Resources and Resreves granted under the New Order Mining Right (NOMR) covering 11 137 hectares, expiring October 2023. An application will be submitted to the Department of Mineral Resources to extend the NOMR, aligning it with the Colliery’s remaining 17 years LoM.

Operations post the Report

  • A total of 369 895 t of RoM coal was mined at Uitkomst between 1 March 2017 and 31 August 2017.
  • The company benefitted from R60 million (US$4.6 million) in positve working capital as at acquisition date, namely 30 June 2017, resulting in positive cash flows as this is realised.
  • David Brown, Chief Executive Officer of CoAL, commented:

    The addition of Uitkomst is a critical requirement for the Company at this stage in its lifecycle. The colliery provides CoAL with a cash generating asset that will assist in the funding of the business while the Makhado Project is being developed, covering a significant portion of the Company’s overhead costs. The high grade metallurgical coal products sold by the Uitkomst Colliery facilitates access to these markets, providing further insight while the hard coking coal marketing strategy for the Makhado Project is being finalised.

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